I know of one foreclosure on a house with a circa $10K mortgage on a street that has housed very wealthy and powerful people, including a few I am sure everyone posting here would know about. But while the prices might fall there because of the foreclosure, I am guessing it would be a fraction of that caused by a foreclosure in the neighborhood described in the post. And I believe the banks have a pretty good algo for seeing those differences.
I know a man who hasn’t been paying for 18 months. His home is in a very nice neighborhood. MT payday loans He hasnt recieved anything from his servicer. He told me that he asked a friend at another bank if he would check out the status on his loan. Not even a notice of default yet.
I like the mark to market explanation. In our area, the 500,000 plus market is dead (500,000 is a mansion here). The houses in that range have lost alot more equity than the smaller houses. Perhaps someone realizes that rehabilitating a trashed squatted in mansion is significantly more expensive than fixing a trashed modest home. Maybe they are hoping the once rich occupier wont trash the mansion. I wouldnt put it past alot of them if they thought they could make a few bucks selling copper or light fixtures.
The last big project I was on in Montecito. The client had sold his business in Santa Ynez to finance the extensive remodel, not sure if that went into the purchase. He kept his business in Santa Barbara. When we were getting towards the end of the project the client was less friendly and my boss said he was complaining about cost but I saw much more money going out after this bit of here-say hit my ears. I personally went and picked up a very expensive antique in a Montecito shop (no bargain hunting there) to deliver at that house. It was lavishly furnished as the remodel finished up. The house went on the market shortly after we finished the job. One funny part of this is at the entry gate on East Valley Road there’s a mature hedge inside the gate screening a view of the house, a new-old (mature) hedge, it was put in by the client before he marketed it. This was 06 early 07. I think this reveals a tone of spending and attitude in the moneyed residents of So Cal.
In the neighborhood in Los Angeles where I grew up (Hancock Park/Windsor Square) the banks have been selectively shortselling the properties on the arterials over the last couple years. In the neighborhood, there are two N/S arterials (Highland and Rossmore) and 2 E/W arterials (3rd and Beverly).
I have seen many homes (12 or so) on Highland (the busiest of all the streets) sell short, and one on each of the other arterials both N/S and E/W but I have only seen one sold short in the “interior” streets although there are many homes on these streets that are owned by flippers.
My guess is that the banks prefer to get rid of the less desirable high dollar homes (those with the biggest location flaws) before they start to foreclose on the more desireable ones.
The homes in the neighborhood are all 7 figure homes with a number of them being upwards of $10,000,000 (bubble prices).